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Is agriculture the key to development?

Today is World Food Day. That means there are plenty of articles and statements today by the agricultural lobby calling for more investment in food production and agriculture. People who work in agricultural research call for – surprise surprise – more investment in agricultural research. EU and US farmers who grow more food than they can sell demand that aid budgets are used to ship their surplus as food aid (even though, according to MSF, it is “nutritionally substandard”). A lot of words will be written about the need for more food production to tackle hunger.

On this World Food Day, I urge you to take a little time to read instead Amartya Sen’s classic book, Poverty and Famines : An Essay on Entitlement and Deprivation, written 30 years ago and for which he was awarded the Nobel Prize in economics. Rarely has a book got to the nub of an issue so clearly in its first two sentences:

Starvation is the characteristic of some people not having enough food to eat. It is not the characteristic of there being not enough food to eat.

This is a fundamental insight. People are hungry not because not enough food is produced but because they are too poor to buy it. In Sen’s language, the poor do not have enough entitlements to enable them to eat. Sen argued that, in most circumstances, instead of giving food to the poor we should give them cash to enable them to buy the food they needed. This would both give people access to food, and strengthen local markets and improve the livelihoods of local food producers.

Official Nobel Prize portrait of Amartya Sen

In a subsequent book, Sen argued that famine is a political issue more than a problem of food production. ‘It is not surprising that no famine has ever taken place in the history of the world in a functioning democracy,’ he wrote in Development as Freedom.

Yet we still talk about hunger as if it were, at heart, a problem of food production. (For example, see these remarks yesterday by the Director General of the UN Food and Agriculture Organisation, calling for a 70% increase in food production). When we understand that hunger is a problem of poverty, the policy options look quite different.

But how do we tackle poverty?

Three quarters of the world’s poor live in rural areas, and most depend on agriculture for their livelihoods.

The agricultural lobby sees a way to restate their case. Perhaps they can accept that hunger is a problem of poverty, not food production. But the fact that the majority of the world’s poor work in agriculture means, they say, that the best way to improve the incomes of the poor, and so reduce hunger, is to increase agricultural productivity. More adventurously they claim that more effective agriculture can drive the whole process of development, by increasing farm incomes, leading to rising savings and investment and so kick-starting industrialisation.

This is a plausible story, but it is not as persuasive as the alternative interpretation of the high correlation between poverty and agriculture: the fact that most poor people work in agriculture suggests that the best way to escape poverty is to get out of agriculture.

When people leave farms and get jobs in manufacturing their incomes are both higher and more secure. Demand for food in the cities grows; the number of people working in agriculture falls; food prices rise; and the remaining farmers get higher incomes. Rising incomes enable farmers to invest more in irrigation, fertilizer, machinery and seeds. Agricultural productivity rises, not as a consequence of direct efforts to improve agriculture but as the indirect consequence of industrialisation. On this view, industrialisation will drive improvements in agriculture, rather than the other way round.

If this second view is right, if you want to tackle hunger, reduce poverty, and improve food production you should focus your investment on more rapid industrialisation and job creation, not better farming.

I am not against investing in agriculture. Better access to existing technologies, and the development of some new technologies, could make a big difference to the lives of farmers in developing countries. But I am against promoting the romantic idea of happy peasant farmers. Farming in developing countries is an unremitting, unrewarding life and it is likely to stay that way for many generations until industrialisation pushes up farm incomes. And we should not accept uncritically the claim that agricultural productivity is an especially important driver of poverty reduction and industrialisation.

So on World Food Day let us remember Sen’s insight that hunger is not a problem of food production but of poverty. The fact that most poor people work in agriculture suggests that a good way to escape poverty is to get out of agriculture. So the best way to reduce hunger and help people out of poverty may be to focus not on improving agriculture, but rather on helping people who want to leave agriculture into more rewarding work.

18 comments on “Is agriculture the key to development?”

Although I am compelled by your thesis I don’t think we can simplify ourselves away from what industrialization has brought to our world. Everywhere we look and analyze the result is dauntingly bad and that chiefly in the following aspects:
1. environmental degradation
2. total failure of states and democracies – based solely on wealth accumulation – this to such extent that we have companies that practically regulate themselves as they have far more resources than practically what any regulatory body can muster with and are often times left to be regulated by the market – along side with poverty increase (this happening in such pace never seen before right in front of our eyes in the developed alike developing countries, good examples here being japan, usa, ethiopia from both categories), practically states are failing to distribute wealth in a way that everyone would have thought had been possible

In a situation where labor unions alike states have and are continuing to fail regulate our industries to believe that they will be the source of future growth for me is not realistic. Furthermore although the lone peasant might not provide a base for wealth building as we have known it so far it could be promoted and developed in such manner that its a basis for self sustaining existence in full consideration of our environments and without over exploitation and without creation of such surpluses as you very well mentioned in the initial part of your post. Please look for instance here http://ourworld.unu.edu/en/a-thousand-suns-the-view-from-ethiopia%E2%80%99s-gamo-highlands/.

Thank you for some thought provoking ideas and keep up your good work.

Owen replies: Gobezu – thanks. I do understand your point that industrialisation has not been an unmitigated benefit for everyone. But I take very seriously the fact that when people have a choice, they nearly always choose jobs in the formal economy over agriculture. Westerners have the luxury of dreaming of a romantic life in rural idyll: but that is simply not the reality for people living in poverty in developing countries and we must be careful not to impose our romantic ideas on others.

I was wondering if anyone would quote Sen on World Food Day. I completely agree:
“Starvation is the characteristic of some people not having enough food to eat. It is not the characteristic of there being not enough food to eat.”

It’s also true that there is a huge correlation between poverty and agriculture, particularly small scale rural farmers. But I think it’s a slight simplification to suggest that what we should do is to help those who want to leave agriculture move into more rewarding work. Not because that is not true, or morally just, but because it overlooks the different pathways that bring systemic changes to provide those opportunities.

Surely one of those paths includes increasing agricultural productivity, and/or increasing opportunities/profits for farmers by working with multiple stakeholders in the value chain (some who surely do work in the manufacturing industry) to build relationships that can add value to all levels of the chain.

“When people leave farms and get jobs in manufacturing their incomes are both higher and more secure.” True, but where do these jobs come from? Many farmers agreed with you and have traveled to cities to reap those rewards only to face a different kind of poverty when those jobs weren’t there to greet them.

When 70 percent of your population are small/medium scale farmers how do you manage the transition from an agricultural to industrial economy without focusing on advancement of both farmers and manufacturers simultaneously?

There is no one path to development (and I read you regularly and know you don’t think so either) and I don’t pretend to know how it happens, but I can’t imagine developing without working with farmers. Not because I think that will solve hunger issues (directly), but because farmers can’t move out of farming without first becoming better farmers.

I’m inclined to agree with you Owen. There are many places where you look at the effort being put in by aid agencies to increase agricultural production and wonder whether it is like King Canute. And even more so with the predicted effects of climate change. Focus on getting the children healthy and well educated – beyond just primary level, with relevant (and not necessarily old school “vocational”) skills, and let them make their own choices about which opportunities to pursue. Urbanisation is clearly not without its problems, but that’s not a reason to discourage the inevitable.

And in terms of the opportunities that may be available, it would be interesting to hear your thoughts on DFID’s new strategy on “wealth creation” (ref Andrew Mitchell talk at LSE this week).

Owen, amazing that you understood what I had written. Thanks for your effort, because reading back I just couldn’t get it myself.

Anyway back to the issue…

My idea is that we need to have vision and build our society upon that instead of being victim of the tide, and that the basis for such vision is becoming very clear as the day goes by, and that is protection of our environment, not only for our own sake but also for the coming generation.

Hi Owen, thought-provoking but I disagree on the primacy of agriculture in development and think the world has changed a bit since Sen did his work on production v access – see http://www.oxfamblogs.org/fp2p/?p=3790 for a response

Thanks. We agree, as you say, on two key points. First, that hunger today is caused not by lack of food production but by the poverty and power imbalances. Second, that it is wrong to try to romanticise the life of a peasant farmer in a developing country.

You say that agricultural surpluses might be the route to industrialisation, citing Ha-Joon Chang. I don’t say this impossible: just that it in at least some countries, things will work the other way round, with faster economic growth driving up agricultural productivity. Statistically it is always going to be difficult to disentangle whether the industrialisation improvements in agriculture or the other way round, but I think Stefan Dercon told me that he had data which convinced him that industrialisation tended to lead, not follow, improvements in agriculture. But you surely agree that industrialisation is possible without being led by agriculture (think of Singapore, for example)? So on this, I suspect we also agree.

You also say that although low food production isn’t the driver of hunger today, it may be in the future. Well: maybe. (Remember the Club of Rome and the Limits to Growth?). Today in Ethiopia wheat yields are about 1250 kg/ha, which is about a fifth of yields in the UK. The reason for relatively low yields is that Ethiopian agriculture is almost entirely rain-fed. Adoption of existing, simple technologies such as irrigation and fertilizer could massively increase yields in countries like Ethiopia, Zimbabwe, Mozambique and Botswana. If the food market tightens, as you say it might as a result of climate change and population growth, and so food prices rise, farmers will be able to spend more on their farms, and agricultural yields in many developing countries will multiply. All without specific investment by governments and international agencies in food production.

When I hear that donors are suddenly interested in food security again, I ask myself a question: Are donors trying to increase food prices – which would increase the incomes of poor food producers in developing countries; or are they trying to reduce food prices to make their own consumers better off?

I accept that it isn’t impossible that low food production will become a problem in the future; but I think it more likely that rising food prices will generate a swift and significant supply response which will enrich, rather than impoverish, farmers in developing countries and provide the world with enough to eat. Of course, climate change on the scale that we seem to be heading for will be a huge problem for some farmers, and indeed for some countries.

Finally, you urge us to take account of the interests of small farmers, and farm labourers, as we address the need for greater food production. There are many poor people in the world who are doing work that is relatively unproductive – which is why those people are poor. In principle their poverty can be addressed in one of two ways: by increasing their productivity in their current work, or by helping them to move to something different. Generally people experience really big improvements in their livelihoods and standards of living when they move to doing something different, not through marginal improvements in their existing work. You are right to be concerned about poverty and inequality affecting small farmers. I would not be surprised to find that – in some locations and in some crops – smallholder agriculture is not efficient, and that it makes sense for it to be replaced by large scale commercial farming (especially if you are concerned about overall food production). The fact that many people who live from small farms are very poor is, on the face of it, a reason to help them transition to something else, rather than trying to help them scratch a living out of something which seems to be fundamentally unproductive.

So thanks again for commenting. I am glad that we agree on the main points: that hunger today is caused by poverty not lack of food production, and that we should be very careful not to peddle romantic ideas of peasant farming in developing countries.

Very good article, I agree in essence: pro poor economical development is in essence rising productivity of labour. Agriculture manages this in the first place by ejecting people who earn less than a dollar a day to places where they can be more productive. The people in the shanty towns of Africa know why they flee the land: they are not stupid, like some people like to suggest. Indeed, when someone tills the earth with a hoe, and you pay him more than the bare minimum, you are in most cases losing money.

However the problem is with mixing objectives. Aricultural research and investment will be necesary to respond to the rising demand for food and non-food agricultural products (such as meat or textile), and is critical for long term development. However, the effect in poverty alleviation is not guaranteed.

Pro poor rural development will depend more on changing power relations, social programs and land redistribution. Labour rights for rural workforce and schooling for those who want to leave the sector.

Thanks Owen for what sounds like exasperation towards the World Food Day narrative. It is refreshing, though-provoking and entertaining.

But I do question your argument on two pretty fundamental points, which I would love to hear your reactions to.

Expanding on your stats-speak “it is not as persuasive as the alternative interpretation of the high correlation between poverty and agriculture: the fact that most poor people work in agriculture suggests that the best way to escape poverty is to get out of agriculture”, I suggest it important to consider the possible omitted variables involved here. Sure, most people who are poor sustain their livelihood through some form of agriculture, but it does not follow that agriculture is the cause of poverty.

One big, fat omitted variable is the glaringly obvious rural context. The distinction between agriculture and rural living is important because it forces you to think about what it means to live in a rural location: restricted mobility due to rougher roads hampering transportation of goods, access to services, opportunities to meet and collaborate, less competition in local markets, limited communication and information availability leading to slow learning of new skills, easy exploitation by the better informed…

These are some the biggest challenges that poor, rural people face, not that they work in agriculture per se. When some of these difficulties that act as bottlenecks to rural development are addressed, then agriculture remains an arduous life, but one that might be occasionally remitting and rewarding.

Of course that’s not to say that heading to the towns and cities isn’t perhaps a quicker way of escaping the isolation of rural life and drugdery of agriculture. Here’s my second point though, we must not forget the reality that many poor people face when they reach urban areas: a higher paying, more secure manufacturing job is the dream that most town-bound migrants fail to find. Many end up in slums, working even more informally for little more that buys a lot less, and certainly living even greater unremititng and unrewarding hardship.

Prof. Sen’s entitlement approach explains why, even though there has been no famine in a democratic state, such as India, that same democratic state will have endemic malnutrition. The problem comes down to arbitrage and the manner in which, over the long-run, institutions will follow the money. India has a number of finely crafted subsidised food grain programmes for the malnourished, but since they are long-term, informal institutions have developed to move that grain away from the malnourished to the open market where that grain has more value.
The only way, over the long-term to overcome the arbitrage effect is to raise the entitlements and purchasing power among the abjectly poor and malnourished – ie economic development. Part of that process involves a migration to urban areas where jobs and opportunities are more available concomitant with a reorganisation of the agricultural sector.
Regarding the comment about the peddling of romantic ideas about peasant farming. This is logical, if you look at it as a marketing strategy among those NGOs dependent upon volunteer support and financial donations. In such cases the volunteers and donors are profiting psychologically. Those NGOs which invest in educating their donors and volunteers by referring to the expansive and often times equivocal empirical literature put themselves at a competitive disadvantage vis-a-vis those NGOs which make little such investment but instead tap into existing simplistic and highly emotive mythologies. The romantic notion of an autarkic rural lifestyle in communion with nature is one of several such mythologies and marketing strategies.

I agree with the quote from Prof. Amartya Sen’s, and I do agree that in developing countries, the predominant pop at the BoP is that of small and marginal farmers whose lot is pathetic. I also agree that their situation is getting unviable by the day, forcing them to look at other options…resulting in rural-urban migration, lack of sufficient farm hands, escalation of labour costs. However, this migration in search of jobs has had catastrophic and chaotic effects and consequences…with swelling of urban population throwing urban infra out of gear for starters and causing allround discontent. This newly migrant community suddenly finds that “grass is not as green as they thought” on the other (urban) side- but they have no way out other than to grin and bear it. While the incomes may have increased, their urban costs are disproportionately high, resulting in their having to make such sacrifices such as leaving their families behind in the village, living in unhygienic surroundings, working the butts off around the clock….all this adds up to their high stress, ill health and low quality of life, not to forget other social problems caused by this separation of families. The point that I wish to make is that people ordinarily would love to remain around the place they call home, and not move to alien and difficult to live in type surroundings, unless they isn’t an alternative. As a followup to this, I’d submit that if there were income augmentation opportunities in their original backyard, farmers would generally opt to stay put and leverage this rather than look at options such as moving to find a job in the city.
We have been successfully working with farmer groups in “backward” rural regions in India, and have been providing various kinds of supportive services in aid of the small farmer, in order to improve his income. eg. providing basic infra locally such as soil testing facility to assess the quality of the land and map to appropriate crop, access to guaranteed quality seeds, fertilizers; advice to mitigate threat of pests and diseases, access to credit, market connectivity and transactional systems, mechanization vs labour shortage, etc…In parallel, we have been able to organize the farmers into logical groups for better collective leverage both on supply and market side. As a result of these social and technical interventions, we have reported substantial income increases (60-400%), caused due to improved productivity and savings(use of genuine products vs spurious ones, better cultivation and risk mitigation practices, access to multiple markets, aggregation benefits and removal/ reduction of the harmful influences of the unscrupulous middlemen and money lenders who milk the system at the expense of the farmer). As a result of this increased cash flow and the resulting prosperity, the farmer family is now looking for fulfilling his other priorities such as better primary health, accessing appropriate vocational training possibilities and allocating some spend towards transportation and other self actualization needs. Given the increased incomes, this is being deployed on old fallow lands which are now being reinvigorated and reused…new businesses such as farm equipment leasing, bicycle & moped sales, electrical pumpsets have sprouted, and there has been a great fillip in the areas of seed and other input supplies. The point being made here is that it is important to save the lot of the farmer- who is isolated, fragmented and marginalized…and look at him as a human being, taking into account his needs and also valuing his knowledge and abilities to run his business…instead of condemning him to some “industry” where he is most likely to end up at the bottom rung (for want of appropriate skills and exp) and suffer miserably while maybe making some additional pennies that anyway get frittered away due to the higher costs and situational issues typical of urban life or maintenance of multiple households etc. Incidentally, we are currently in an expansion phase that should see us addressing a farmer pop base of ~350,000 (family size of about ~2 Million plus). In effect we are trying to integrate the agro ecosystem stakeholders and bring them together in a manner that would serve the needs of the small farmer in a hassle free, cost-effective, convenient way at the local village…and in the process each stakeholder bringing some particular value to the chain and benefiting appropriately…very important for the sustainability and future of all the agro ecosystem players…most of all the farmer. Hope this helps. Case study at https://docs.google.com/fileview?id=0B10yI2jae4zFYTljNmM2Y2QtY2I1NS00MGMwLWI5Y2ItNjgwZjQ4ODE5Yzdi&hl=en

Hi Owen,
really enjoy reading your posts and thank you for the constant flow of thought provoking content.
For this discussion I’ve seen a few things that I can accept are above my level of understanding but there are a few things that I need to support and mention.
The romanticizing of the farmer life is completely unfair. I remember having this conversation with Long Term Volunteers from Engineers Without Borders during my placement. The males where thinking how nice it would be to live off the land and proceeded to ask me what I thought. Being raised on a farm myself in a small town near Quebec city I knew it was hard work for little reward. I also knew that women on said farms often lead a hard life in the villages I had visited in Burkina Faso. Life just isn’t as enjoyable if you don’t have some sort of security and safety measures.

That being said, there still are many families who prefer to live off their hard work and away from industrialization. Which is completely fair, but should not be forced upon anyone. It also does take a lot of work, knowledge and experience. If that is something NGOs are willing to help with, offering the knowledge to make farming more efficient and worthwhile for farmers who want to be farmers then I do not see why we should steer away from that. However, having all our eggs in one basket is definitely not the solution.

The main problem I have however with people saying that better agriculture knowledge is “the path to development” because industrialization is evil is that Westerners have no right to say any country still developing shouldn’t choose that path. We need to reduce Westerner Carbon footprint, not restrict the non existing one of developing countries. This is a fairly selfish idea that India or any sub-Saharan country in Africa (and many others across the world) should not be permitted to increase their Carbon footprint because others are using too much energy. There is a balance to be found and requires growth on some part and reduction on others. Industrialization is not a pretty sight, but it has some purpose and has brought great social change around the world.